Council, EDC learn about Type B sales tax issues

GONZALES — Gonzales City Council and Gonzales Economic Development Corporation have had some discussion at recent meetings about city projects and what EDC money can and cannot be spent on, so Wednesday night, they had a joint workshop and a special guest speaker to lay it all out for them.

Jeff Moore, a partner in the Dallas-area law firm of Brown & Hofmeister, represents Texas municipalities as well as Type A and Type B EDCs. He is the former assistant city attorney for the City of Austin. He has served as an Assistant Attorney General with the Texas Attorney General's office for four years and has also been giving training seminars on Type A and Type B Sales Tax since 2001.

Type A and Type B sales tax are sales taxes which cities may impose for economic development and are authorized pursuant to the Economic Development Act.

Gonzales is one of 492 Type B cities in Texas. The Type B sales tax to GEDC is half a cent, so of the 8.25 cents per dollar tax paid on retail purchases 6.25 cents goes to the state, one cent goes to the city, a half cent goes to the county and the remaining half cent goes to the EDC.

The main purpose of the joint discussion and Moore's visit was for council to understand what the Type B sales tax money could be used for.

According to Moore, Type B corporations may pay for land, buildings, equipment, facilities, targeted infrastructure and improvements for: professional and amateur sports and athletic facilities, tourism and entertainment facilities, convention facilities and public parks; related store, restaurant, concession, parking and transportation facilities; related street, water and sewer facilities; and affordable housing.

A Type B city's EDC may also fund projects to promote and develop new and expanded business enterprises that create or retain primary jobs, like: public safety facilities; recycling facilities; streets, roads, drainage and related improvements; demolition of existing structures; general municipally owned improvements; and maintenance and operating costs associated with projects.

Type B EDCs also may seek voter approval to spend Type B sales tax funds for a water supply, water conservation program or cleanup of contaminated property.

According to Moore, the Type B sales tax money could be used to offset the cost of the city's much-needed hydroelectric dam repairs; but, it would have to go to the voters first.

All Type B corporations, must hold public hearings on all other types of projects. In addition, all Type B corporations must wait 60 days from the first public notice of the nature of a project before providing funds.